Description: This paper evaluates the current practice of operational risk management in the insurance sector. Operational risk is nothing new in insurance, but, because of regulatory requirements, companies have initiated computation of risk capital for their operational losses. The current effort to manage operational risk is not a naturally evolving phenomenon, and operational risk, in the Basel Committee on Banking Supervision’s Basel II definition, is unlikely to be a significant cause of insurers’ failure. In addition, the current Basel II definition of operational risk is not suitable for the insurance sector. Consequently, the invention of models and tools based on the definition is incomplete and illusionary. My findings are based on the analysis of dozens of interviews with insurance industry professionals. I demonstrate the way operational risk is quantified in practice, show that the result obtained from this computation is of littl e use in managerial decision making and propose a set of policy recommendations illustrating the characteristics of operational risk in insurance. This study can be used as a platform for launching dialogues to initiate fresh thinking about operational risk in insurance beyond the current artificial and narrow boundaries.

Description: 2011 SOA Enterprise Risk Management Symposium, Chicago. This paper suggests the use of a policy event-based loss estimation method using expert input and simulation for forecasting long duration expenditures: that is to say, there is an efficient time, which is random and observable to replace a physical asset.

Description: In this article, the interviewers will discuss the pros and cons of centralized modeling function vs a business unit based modeling function. Their experience will help us in identifying factors in contributing to a successful centralized model function and understand how to set expectation with modeling stakeholders.

Description: The United States Geological Surv ey USGS released the latest version of its National Seismic Hazard Maps NSHM in April 2008. The maps, which were last updated in 2002, define the latest scientific view of earthquake hazard at varying probability levels across the United States.

Description: 2011 Enterprise Risk Management Symposium, Chicago. This paper highlights the impact that a change in conditional data would have on a variety of risk assessment models, with specific emphasis on investment forecasting.

Description: This session 15 PD of the Toronto Spring Meeting includes an update on specific approaches adopted by Canadian insurers and regulators to deal with capital guarantees on segregated fund products, capital modeling in the Canadian banking industry, and emerging issues using these techniques in the U.S. From the Record of the Society of Actuaries, Volume 27, No. 2, Session